Foreclosure Auctions and Bargains

In Southern California the weather is grim – real estate market is falling while bank foreclosures are rising. It has become a hunting ground for those prowling around for quick bucks but it does not apply to everybody. There are many who are sitting on the fence and watching but the offers from bank owned foreclosed houses are sometimes hard to resist. The prices are way below the cost price of the unit. That does not however always spell out a bargain.

In Temecula the auction house was choc-a-bloc with novices and investing professionals ready to snap about 80 foreclosed houses waiting in line. All of these belonged to banks eager to get back at least some part of the amount they had loaned. As per rules the successful bidder had to immediately pay 5% of the purchased price in ready cash or $2,500 – whichever was greater. The deal was to be then finalized within the next 30 days.

The houses had been begging to be sold for quite some time. Banks gain by not waiting for the sale to take place in real estate market. This is the opinion of David Webb a representative of auctioneers Hudson & Marshall. Banks have to give the nod to all the winning bids. The units are sold on an as-is-where-is basis. Thus nobody can vouchsafe for the condition of these.

Collen Rutledge had invested in a two-storied Perris house in an auction for $250.000. An extra $12,000 went towards commission. Another $25,000 was spent on repairs on renovations like fixing granite counter tops, hardwood floor and other steel appliances. Collen was hopeful of profits and set a price tag of $369,000 for it. At that time it was the only foreclosed house in the area but with more and more coming up close by the prices have started to fall. She brought down her asking price many times and it is now $274,000. She is hopeful that this will give her something extra by way of profit. Today she admits that the auction frenzy had caught and swept her away. It was unwise to be thus overtaken.

Experts opine that prices are going to further tumble so that what looks like a bargain today may become a weight tomorrow. If you do not watch your step you might fall and get hurt. Foreclosure auctions have become a frequent occurrence in South California.